When Heydar Aliyev, Azerbaijan's former Communist leader, arrived in Baku in 1993 to take over control the country was facing defeat on many fronts. Azerbaijan was losing the war in Nagorno-Karabakh; cities were flooded by displaced persons; the economy was hit by the collapse throughout the Soviet economic space; Russia and Iran were hostile and the West was largely uninterested. Aliyev was able to give the population stability. He reversed many of Elchibey's foreign policy decisions and was able to normalize relations with all major powers in the region.

The most pressing dilemma for Aliyev was to decide what to do in the war over Nagorno-Karabakh and adjacent regions. As Thomas de Waal noted, the confusion which marked the period from Elchibey's ouster to Aliyev's election had serious consequences:

"During four months of confusion, after one president lost office and before another gained it, Azerbaijan lost a huge swath of territory to Armenians east and south of Nagorny Karabakh. This was effectively when the war was lost."[1]

Initially, Aliyev did try to regain Nagorno-Karabakh. To minimize the political threat to himself, he disbanded battalions loyal to the Popular Front. He was then faced with the challenge of creating a real army. In December 1993, Aliyev launched a new military campaign in Nagorno-Karabakh, which lasted throughout the spring of 1994. It failed. These months saw a high number of Azerbaijani casualties far exceeding Armenian ones. In May 1994, Russia negotiated a ceasefire agreement, and the war was technically over.[2]

Aliyev decided to mend relations with Russia and Iran and to create better ties with the West. He pursued a foreign policy described as balanslastirilmis (balanced). This, he argued, was essential for Azerbaijan to survive in a difficult neighborhood and rebuild its economy. As Thomas Goltz described it, Aliyev "played the Iranian card well" and "was not above groveling before the Russians as part of his policy of realpolitik."[3] Azerbaijan agreed to join the Russian-led Commonwealth of Independent States in 1993 (the step which was sharply criticized by many Popular Front supporters and Elchibey himself).[4]

Aliyev acknowledged Moscow's interests in the South Caucasus region. He signed protocols referring to the common defense and economic space. Goltz noted that Aliyev paid "lip service" to Moscow and "obstinately refused to implement any of the agreements in a meaningful way."[5] The ties between the two countries improved in and resulted in a number of strategic commercial and economic agreements, most notably a lease of Qabala (Gabala) radar station and the delimitation of the Caspian Sea.[6]

Aliyev maintained friendly ties to Turkey through his personal relationship with Demirel. Aliyev saw Turkey as a strategic partner and a "gateway to the West for the Azerbaijani economy", and faithfully cultivated this friendship[7] Turkey was also the safest way for Azeri oil to reach Western markets.

Baku-Tbilisi-Ceyhan pipeline. Photo: earthmagazine.com

Aliyev used his country's hydrocarbon resources to give the West a stake in Azerbaijan's stability. Oil exports and the construction of the Baku-Tbilisi-Ceyhan oil pipeline (completed in 2006) became important factors of Azerbaijan's foreign policy. High levels of investment and technological expertise were necessary to develop Azerbaijan's hydrocarbon resources.The decision was made to invite foreign companies into Azerbaijan. As Hoşbakt Yusufzade, a leading Azerbaijani oil expert and the author of the energy strategy of Azerbaijan, recalls:

"When the USSR collapsed, technology and money were needed to drill the Azerbaijani oil. We could either wait 30 years until we had the money and means or invite foreign companies. Aliyev chose the latter.

There were people who objected. They said "we can do it ourselves." But it was a risky and expensive work and having international partners was a very good idea." [8]

When Heydar Aliyev came to power, he halted the ongoing negotiations Elchibey had begun with western oil companies, which excluded Russia and Iran. The first thing Aliyev did was to grant a 10-percent share to Russia's Lukoil in a forthcoming contract.

Heydar Aliyev created a team to negotiate the terms of the contract with a British Petroleum-led consortium of international companies for development rights of the Azeri oil fields. Heydar Aliyev also sent his son, Ilham Aliyev, "to be his eyes and ears at the talks".[9] The negotiation focused on the distribution of profits and the oil fields that would be included. By all accounts, the negotiations produced a good deal for Azerbaijan. The contract negotiated entails investment of 7.4 billion USD over 30 years in three offshore oil fields (Guneshli, Chiraq, Azeri). In addition, the consortium had to pay the Azerbaijani side a 300 million USD "signing bonus."[10]

The consortium consisted of ten major companies from six countries. As oil expert Levine explains in his book on Caspian oil politics, the process of distributing shares of the fields to the consortium partners was "a strategy of building a diplomatic shield". The final contract, which was soon referred to by Azerbaijanis as "contract of the century", was signed on 20 September 1994 in Baku's Gulistan Palace. Looking back today, Yusufzade highlights its importance not only in terms of investment but also as a signal to other investors that Azerbaijan was stable enough for large-scale investments.[11]

Having secured some gains in foreign policy and in oil diplomacy, Heydar Aliyev set out to consolidate his domestic power. In October 1994, Aliyev removed Suret Huseynov, the commander who had staged a rebellion against Elchibey in June 1993, from his position of Prime Minister on charges of treason. The same charge was put against the representatives of other "power ministries", i.e. the Ministers of Defense and the Interior. Huseynov fled to Russia.[12]

Alikram Hummatov. Photo: qwiki.com

Aliyev's position remained contested. As Charles King, an expert on the South Caucasus, noted that in the first years of his presidency Aliyev's rule was challenged by regional clan strongholds and loyalists of different Russian, Turkish and Iranian networks. National separatism had resurfaced in the country's south populated by Talysh, an ethnic group, speaking an Iranian language. In June 1993, Talysh nationalist colonel Alikram Hummatov had proclaimed "Talysh Mughan Autonomous Republic" during an uprising in the city of Lenkaran in the south of Azerbaijan. While Aliyev had no army at his disposal at the time, he instead provoked a local rebellion against Hummatov, who ended up fleeing.[13] As King described it,

"Unlike his many opponents, Aliyev stood at the center of a vast network of friends and colleagues from his days as Communist Party leader and, even more crucially, from his earlier career as head of the Baku branch of the KGB."[14]

Other armed uprisings and assassination attempts against Aliyev followed,[15] yet he was able to consolidate his grip on power after each one.

The pro-presidential New Azerbaijan Party (YAP) was established and a new constitution was adopted in 1995. The first parliamentary elections of independent Azerbaijan were held on 12 November 1995. The YAP party came in victorious.

Further reading

Heydar Aliyev (1923-2003), is one of the most influential politicians in the history of modern Azerbaijan The New York Times described him in a 1993 article "Ex-Kremlin Figure Returns to Power in Azerbaijan"as"almost a perfect child of the Soviet system" who successfully reinvented himself "as an anti-Soviet Azerbaijani nationalist."

In October 1993, Aliyev was officially elected president.

In his article "Parliamentary Elections in Azerbaijan: A Failed Revolution" (Problems of Post-Communism, vol. 53, no. 3, May/June 2006), Anar Valiyev analyzed the West's reluctance to raise objections during the 1993 elections, in the name of preserving stability in a strategically important region:

"Neither international organizations nor the United States and Europe criticized the elections. More concerned with regional stability, the foreign powers hailed Heydar Aliyev's iron fist for bringing stability to the country, and oil companies launched negotiations for oil contracts. Aliyev's accession satisfied all the regional players, including Iran and Russia, which had seen Elchibey as a threat to their interests" (p. 18)

Caucasus expert Svante E. Cornell, in a 2001 article "Democracy Falters in Azerbaijan" in Journal of Democracy, vol. 12, no. 2, notes in particular that Aliyev benefited from the support of Turkey, which by then had grown disappointed with Elchibey's inability to bring stability to the country:

"Given his [Aliyev's] Soviet past, most regional and international observers assumed that Aliev would be Moscow's man. Subsequent evidence has shown, however, that Aliev's main support has come from the same quarter that had supported Elcibey--Turkey. In fact, the Turkish Foreign Ministry had always suspected Elcibey of being too inexperienced and erratic to lead Azerbaijan in such a complicated internal and regional context, and it saw Aliev, with his vast political experience at the highest level, as the one man who could manage the task. By early 1993, the situation in Azerbaijan had gotten so bad that Turkey had "started looking out for alternative horses to back." Aliev, then head of the Azerbaijani exclave of Nakhjivan on the Turkish and Iranian border, was the obvious choice" (p. 120).

Audrey L. Altstadt, in "Azerbaijan and Aliev – A Long History and an Uncertain Future" (Problems of Post-Communism, vol. 50, no. 5, Sept. – Oct. 2003), written shortly before Heydar Aliyev's death in December 2003, describes him as "the most significant political figure in Azerbaijan since the death of Stalin":

"In the years of his presidency, Aliyev has maintained the independence of his small state despite pressure and incursions by two powerful neighbours, Iran and Russia, and at the same time he has finessed the demands of more than a dozen foreign oil companies." Aliyev performed an impressive "balancing act" maintaining good relations with the West without implementing democratic reforms.

"He presides over elections that are routinely judged not to be "free and fair" by international observers, but nonetheless Azerbaijan remains a candidate for entry into an expanding NATO. […] Moreover, thanks to his fervent anti-terrorist rhetoric and the offer of small police contingents for Afghanistan and Iraq, Aliyev not only maintains good relations with Washington, but also won the rescission of the hated Sanctions Amendment (Section 907) to the 1992 Freedom Support Act, which had banned direct US government aid to Azerbaijan. Not surprisingly, even his sworn opponents refer to him as ‘The Man'" (pp. 3-4)

In Altstadt's view, Aliyev personified the very institution of presidency in Azerbaijan:

"Aliyev has turned Azerbaijan's presidency into the powerful office that it is. The man, in short, made the office, not the reverse." (p. 4)

In "Democracy Falters in Azerbaijan" (Journal of Democracy, vol. 12, no. 2 (2001), pp. 120-121). Svante E. Cornell sums up the first years of Aliyev's presidency as having restored some stability but thwarted Azerbaijan's democratic development:

"A the wave of democratic enthusiasm that had swept through the republic in 1991-92 had cooled significantly as early as 1993. Political instability and the economic hardship caused by the war, the dismantling of the Soviet command economy, and mismanagement under the APF government had led to a powerful wave of nostalgia for the Brezhnev era. And those "good old years" were associated with one man: Heydar Aliev. Aliev was the only person whom both Azerbaijanis on the street and foreign observers saw as capable of bringing Azerbaijan back on track. For an overwhelming majority of the population, stability was a more urgent concern than the abstract concept of democracy, which was generally seen as having brought nothing but disorder and poverty. It is reasonably certain that Aliev would have won the 1993 presidential election overwhelmingly even if it had been held under proper democratic conditions. By 1997, Aliev was credited, both domestically and internationally, with having restored order in Azerbaijan; with having succeeded in attracting numerous foreign oil companies to the country; with having improved Azerbaijan's standing in world affairs; and (with Turkey's help) with having created the foundation of a modern army."

All this, however, came "at the cost of political liberties and democracy" ("Democracy Falters in Azerbaijan", Journal of Democracy, vol. 12, no. 2 (2001), pp. 120-121).

In another article "Azerbaijan in Transition to the New Age of Democracy", Communist and Post-Communist Studies 36 (2003), Alec Rasizade, while giving credit to Heydar Aliyev's political skills, is highly critical of the growing socioeconomic inequality in Azerbaijan during his presidency:

"what has developed under Aliev's presidency is a pitiable society of social and economic extremes, contrasting the record of Soviet equity in free health care and all levels of education, affordable housing, effective sanitation, and guaranteed employment." (p. 346).

[12] Charles King, p. 227 (Thomas Goltz provides a somewhat different take on this saying that Aliyev gave Huseynov powers that he clearly would fail to carry out so he also was seen by the public as for example responsible for continued losses on the Karabakh front., see p. 414, pp. 447-448).

[15] Two coup attempts involved Interior Ministry troops, and one of the attempts (1995) was linked to the Turkish deep state. This is explained by Thomas Goltz and confirmed by the Susurluk report, as well as by Ozdem Sanberk who flew to inform Heydar Aliyev of the plot. Charles King in his 2008 book The Ghost of Freedom also wrote of numerous coup attempts: "Actual or alleged coup d'etat became an almost annual occurrence – in 1994, 1995, 1996 and 1998 – but in the aftermath of each one, Aliyev was able to augment his power over both rivals and past associates" (p. 277).